Retirement involves leaving the workforce and living on a fixed income for an unknown period. You must make sure your nest egg lasts as long as possible to avoid running out of money.
The 4% rule has become the standard norm for retirement spending was established 28 years ago. It was in 1994 when financial adviser William Bengen created the 4% rule, a general guideline for how much to safely withdraw in retirement. It is reasonable to question whether the formula is still effective.